Ed Bott uses corporate quarterly reports to build pie charts that show where each company gets its revenue.
The best way to understand the differences between these three publicly traded companies is to look at the detailed reports each is required to file every quarter. I did this two years ago, but since then the landscape has shifted. Google tried to diversify into hardware with its acquisition of Motorola Mobility, and Microsoft announced that its goal was to focus on “devices and services.”
How much have the three companies changed in the past two years? For the answer, I looked at the sources of revenue each one reported in their quarterly reports for the second half of 2013. Here’s the breakdown, using the segments that each company uses to define how its business is organized.
Follow the headline link for three quite easy to read pie charts that lay everything out. Google is accelerating its non-advertising revenue:
Two years ago, Google was a one-trick pony, with its revenues coming almost entirely from advertising. According to its 2011 annual report, “Advertising revenues made up 97 percent of our revenues in 2009 and 96 percent of our revenues in 2010 and 2011.” That picture changed slightly with Google’s attempt to move into hardware manufacturing via its acquisition of Motorola Mobility, as you can see in this chart. But the pending sale of Motorola Mobility to Lenovo will shift things back to nearly the way they were. The “Other” category, which includes digital content and non-Motorola hardware products, is still a tiny fraction of the company’s revenues. After the Lenovo transaction closes, Google’s advertising revenues will go back to being more than 90 percent of its total.